May 1, 2011

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The Vendor Landscape of BI and Analytics

by Ravi Kalakota

“In God we trust, all others bring data”

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The “Raw Data -> Aggregated Data -> Intelligence -> Insights -> Decisions” is a differentiating causal chain in business today. To service this “data->decision” chain a very large industry is emerging.

But the interest in BI and analytics is surging. Arnab Gupta, CEO of Opera states why analytics are taking center stage, “We live in a world where computers, not people, are in the driver’s seat. In banking, virtually 100% of the credit decisions are made by machines. In marketing, advanced algorithms determine messages, sales channels, and products for each consumer. Online, more and more volume is spurred by sophisticated recommender engines. At Amazon.com, 40% of business comes from its “other people like you bought…” program.” (Businessweek, September 29, 2009).

Defining Business Analytics

What is Business Analytics? Business Analytics is the intersection of business and technology, offering new opportunities for a competitive advantage. Business analytics unlocks the predictive potential of data analysis to improve financial performance, strategic management, and operational efficiency.

What is BI? BI is the "computer-based techniques used in spotting, digging-out, and analyzing 'hard' business data, such as sales revenue by products or departments or associated costs and incomes. Objectives of BI implementations include (1) understanding of a firm's internal and external strengths and weaknesses, (2) understanding of the relationship between different data for better decision making, (3) detection of opportunities for innovation, and (4) cost reduction and optimal deployment of resources." (Business Dictionary). Most widely used BI tool is Microsoft Excel.
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What is Big Data? Big data refer to data scenarios that grow so large (petabytes and more) that they become awkward to work with using traditional database management tools. The challenge stems from data volume + flow velocity + noise to signal conversion. Big data is spawning new tools that are mix of significant processing power, parallelism and statistical, machine learning, or pattern recognition techniques
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Corporate performance management software and performance management concepts, such as the balanced scorecard, enable organizations to measure business results and track their progress against business goals in order to improve financial performance.
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Data visualization tools, include mashups, executive dashboards, performance scorecards and other data visualization technology, is becoming a major category.
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BI platforms provide a range of capabilities for building analytical applications. Examples are Oracle OBIEE, SAP Business Objects 4.0. There are many choices and combinations of BI platforms, capabilities and use cases as well as many emerging BI technologies such as in memory analytics, interactive visualization and BI integrated search. The idea of standardizing on one supplier for all of one’s BI capabilities is difficult to do. Increasingly, standardization and more about managing a portfolio of tools used for a set of capabilities and use cases.
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Data integration tools and architectures in support of BI continue to evolve. Extract-Transfer-Load (ETL) tools make up a big segment of this category in addition to data mapping tools. Organizations must now support a range of delivery styles, latencies, and formats.
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BI is about "sense and respond." Analytics is about "anticipate and shape" models.

About

Business Analytics 3.0 blog is meant for decision makers and managers who are trying to make sense of the rapidly changing technology landscape and build next generation solutions. It is aimed at helping business decision makers navigate the "Raw Data -> Aggregate Data -> Intelligence -> Insight -> Decisions" chain.